The Economy
Debate between Caroline Lucas and Ed Davey(4 years, 5 months ago)
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Sir Edward Davey (Kingston and Surbiton) (LD)
I give almost two cheers for the short-term measures announced today, but less than one for the medium and long-term measures. The Chancellor will have to produce a much more coherent economic strategy if we are to deal with unemployment in the medium term and with inequality and climate change, which are still massive challenges for our country.
In the short term, the job retention bonus looks good, particularly on the back of the furlough scheme. The VAT cut for the hospitality and leisure sector is also good, but there was nothing for the self-employed; they have been left behind—they have been excluded—and that is just not good enough. The kick-start programme for young people looks good, but why only six months of training? If we are really going to help young people come back and retrain, we have to give them far more than that. And I do not think that the stamp duty measure is going to be a huge boost to people. For a start, the housing market is already picking up now that people are able to buy again, as demand was already there. Secondly, this tax cut will get capitalised in the price; house prices will just go up, not serving anyone, and that will mainly go to the better-off. I would rather have seen help for renters, help for homeless people, and building homes—that is the way to tackle the housing problem in our country.
When it comes to the medium-term, this package is just not up to the moment. We have a serious economic crisis, the like we have never seen, and it comes on the back of the threats that will be posed to parts of our economy from Brexit. We also have the climate change challenge and the global issues caused by the tensions in trade between China and the US. All these things will dampen the global economy and our economy, and I just do not think that the package we have heard today really amounts to anywhere near enough if we are serious about protecting jobs and getting that green transition.
It is difficult to look at the figures and do a proper analysis, given that there is so little data in this plan for jobs, but it looks like this may be the smallest fiscal stimulus in the whole of the G7. So to put this into context, this is not the massive boost that people are saying.
If we really want a fiscal stimulus, we should be talking about the longer term and about the new industries. I was very proud when I was Secretary of State for Energy and Climate Change that we really boosted renewables. We nearly quadrupled renewable power. We became the world leader in offshore wind. We saw jobs created in declining economies such as those in Hull, Grimsby and Lowestoft, thanks to the policies we put in place on the basis of green jobs. Where is that ambition here? I do not see it. There is nothing on hydrogen, as has been said, and no real push for renewables, no real push to make sure that we bring in investment in nature and environmental improvements as part of the climate change challenge, and very little more on green transport.
I say to the Ministers on the Treasury Bench that what we wanted above all, for short-term jobs and long-term benefits for the climate and the economy, was a home insulation package that was much bolder. There is a former Prime Minister who used to say, “Education, education, education,” and I say, “Insulation, insulation, insulation.” I want jobs in every village, town and city across our country. That will be the way to really make sure we do not have a blight on our economy and a blight on young people, and really get a grip.
Caroline Lucas
The right hon. Gentleman is making a powerful case. As well as insulation, does he agree that we need to make sure we have zero-carbon homes going forward? Some 2 million homes have been built since the Climate Change Act 2008 came into being that now need to be retrofitted. Does he agree that the Government must bring forward the future homes standard, and that they were wrong to scrap the zero-carbon homes standard?
Sir Edward Davey
The hon. Lady, whom I call my hon. Friend, is absolutely right. I was part of the team that brought in the zero-carbon homes regulation, and two months after we left office the Conservative party got rid of it. It was an outrageous act of climate change vandalism, and nothing has happened on that, so the hon. Lady is absolutely right.
The idea that the Conservatives have a good record on climate change is for the birds. All the advantages actually came from things that the Labour Government did before 2010 and things that the Liberal Democrats did when we were in charge of the Department of Energy and Climate Change, and they tried to undo almost everything when they had the chance. I saw them trying to undo all the great things—not just zero-carbon homes, but they cancelled the carbon capture and storage plans, which they are now trying to put back with the timidity of a mouse. They do not understand how big the challenge is. This is an historic challenge; we have to move our economy from a fossil-fuel based economy to a net zero carbon economy, and we cannot wait for 2050. We now have an opportunity to retrain our young people, and our whole workforce, so that we can deliver this, creating a green industrial base and a regional strategy that brings everybody up. However, I fear that this Prime Minister, this Chancellor and this Government are just not up to the job.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey(9 years, 10 months ago)
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Mr Davey
My hon. Friend is right: a liberal approach is definitely the best. In the spirit of the coalition, we have together managed to bring down energy bills by reducing policy costs by £50, something opposed by Labour. It is often forgotten that because we have liberal markets in Britain, the UK enjoys the lowest domestic gas prices in the EU15.
Caroline Lucas (Brighton, Pavilion) (Green)
New research shows an 80% fall in insulation measures for fuel-poor homes under the coalition. While the Secretary of State desperately spins about having helped 1 million households, the facts show that had the Government not weakened their policies, nearly 3 million homes would have been helped by now. When will he make energy efficiency a top infrastructure priority with the funds to match?
Mr Davey
I am grateful for the hon. Lady’s question, although I do not recognise her figures. Energy efficiency is a top priority for the Government, and I hope that she will welcome the fact that yesterday I laid before Parliament new regulations to require landlords in the private sector to meet minimum energy efficiency standards by 1 April 2018. That will help 1 million tenants in the most energy-inefficient houses in the country.
Caroline Lucas (Brighton, Pavilion) (Green)
T6. Does the Secretary of State share the widespread disgust at Ofgem’s recent advice on paying energy bills, which included suggesting that families in fuel poverty should make packed lunches for their kids and cancel gym memberships? Instead of that insulting response, does he agree that the Government should consider changing the rules, so that Ofgem advises on energy efficiency and not on packed lunches?
Mr Davey
I have not seen that advice. It is important that Ofgem focuses on trying to give the best possible advice that will help people who are struggling with energy bills. Government advice certainly includes practical suggestions on how to get the financial help that is available and to cut bills.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey
Caroline Lucas (Brighton, Pavilion) (Green)
The private rented sector has the highest proportion of the most energy-inefficient homes, which leads to high energy bills and fuel poverty. Does the Secretary of State agree that we need a robust and enforceable minimum standard for all such homes, and will he explain the failure of the Government’s proposal to specify that that minimum standard should be at least an energy performance certificate band E for all homes?
Mr Davey
I am grateful to the hon. Lady for that question. She will know that this Government brought in a power in the Energy Act 2011 that would allow us to introduce legislation and regulations for the private rented sector. We plan to consult on that soon and take the sort of measures I think she will support.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey(10 years, 10 months ago)
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Mr Davey
I do agree with that. My hon. Friend and Eastleigh borough council are leaders in the bottom-up approach. He will know that there are two areas that we need to tackle. First, local communities and individuals must reduce their carbon emissions to stop climate change getting worse. Secondly, communities must work together to make people’s homes and communities much more resilient to the climate change that has already happened.
Caroline Lucas (Brighton, Pavilion) (Green)
21. Many of us have welcomed the Prime Minister’s acknowledgement yesterday that climate change is one of the greatest threats that we face. Will the Government follow through on the logic of that position, and will the Secretary of State now rule out categorically any weakening of the fourth carbon budget?
Mr Davey
The fourth carbon budget review is under way. I will not prejudge that, and the hon. Lady should not expect me to do so. I will say that this Government are leading the international climate change debate in Europe. The 2030 energy and climate change targets, which will be discussed at the European Council in March, are critical in tackling climate change. She will know that we have to work internationally to do that. This Government and the UK have been leading that debate.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey(11 years, 1 month ago)
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Mr Davey
I cannot, of course, guarantee that. Should Scotland decide to vote for independence, there would have to be a negotiation. We cannot prejudge that negotiation, not least because despite the publication by the Scottish Executive this week, there was a lack of detail on some key elements. The hon. Gentleman is right to point out to the House and the country that if Scotland votes for independence and there can be no guarantee of support for renewables in Scotland from English, Welsh and Northern Irish consumers, Scottish consumers and industry could see price rises.
Caroline Lucas (Brighton, Pavilion) (Green)
4. What recent assessment he has made of the contribution of energy efficiency to reducing energy costs.
Caroline Lucas (Brighton, Pavilion) (Green)
History was made at the UN climate talks last week—not, unfortunately, by an unprecedented breakthrough in negotiations, but by the unprecedented walk-out by 800 civil society groups and trade unions. What assessment has the Secretary of State made of their concerns that the talks are being unduly influenced by the fossil fuel industry? Does he agree that, if that is the case, it is unfortunate, because it does not give the talks a fighting chance of delivering what science and equity demand?
Mr Davey
I met the NGOs before they walked out. I explained the progress we were making in the talks, and after they walked out, we made further progress. No one expected the Warsaw climate change talks to be a breakthrough. They were an important building block— a foundation—for Lima next year and for Paris and the critical talks in 2015. I have laid a written statement on the Warsaw talks.
Energy Price Freeze
Debate between Caroline Lucas and Ed Davey(11 years, 1 month ago)
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Mr Davey
I certainly will because I believe we have the best policies. There are two routes to rebuilding that crucial consensus. The first, which I would love to take, is to invite the right hon. Lady and the leader of the Labour party to discuss the issues with me so that we can try to reach out to Labour Members, explain why we think their policies are extremely damaging, and try to get the energy policy back on to that important political consensus. I fear, however, that that will not be possible. The noises we have heard from the Leader of the Opposition and the right hon. Lady suggest that they do not see the error of their ways, despite many people explaining it to them.
Caroline Lucas
Will the Secretary of State accept that the green deal is not working, that zero-carbon homes are off the agenda and renewable energy is under attack, and that a late amendment to the Energy Bill in the other place shows that the Government are trying to scrap their legal duty to end fuel poverty altogether? Is he really surprised that the public do not believe his Government’s crocodile tears over rising energy bills when the Government’s own policies are making that worse?
Mr Davey
I completely reject everything the hon. Lady said. First, £31 billion has been invested in clean energy since 2010, and according to Ernst and Young we are now the fourth best place to invest in renewable energy—that is up, despite what the right hon. Member for Don Valley often says. More than 85,000 assessments have been made under the green deal, and more than 81% of those who have had green deal assessments have either had work done, are getting it done, or are considering having it done. That is much more of a success. The hon. Member for Brighton, Pavilion (Caroline Lucas) does her case no good by talking down the green deal.
Annual Energy Statement
Debate between Caroline Lucas and Ed Davey(11 years, 1 month ago)
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Caroline Lucas (Brighton, Pavilion) (Green)
If the Secretary of State was serious about helping the fuel-poor, surely he would be acting to make the UK housing stock far more energy efficient, which is the only permanent way to bring down bills, according to the Child Poverty Action Group, Age UK and many other charities that support proposals to recycle carbon tax revenue into energy efficiency. That would bring nine out of 10 homes out of fuel poverty, quadruple carbon savings and create up to 200,000 jobs, so why does the Secretary of State continue to ignore calls for such ambitious policies?
UK Nuclear Energy Programme
Debate between Caroline Lucas and Ed Davey(11 years, 2 months ago)
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Caroline Lucas (Brighton, Pavilion) (Green)
A 35-year contract that locks UK consumers into paying around double the market price for power does not sound like a good deal to me. If the Minister genuinely thinks that it is fair, will he agree to full examination of the terms by the National Audit Office? He talked about the developers being required to share waste management costs, so can he tell us how big the share will be that the public will have to pay for and what the expected cost of that additional subsidy will be? Finally, since there is a cap on the costs that EDF would have to pay for managing the radioactive waste, can he confirm that if those costs increase above the cap, the British taxpayer will have to pay for any top-up costs, however high they escalate?
Mr Davey
I thank the hon. Lady for her question. She might have missed it, but the NAO put out a press release earlier today stating that it will be looking at the details of our commercial agreements, which we welcome, because we are very happy for our proposals to be scrutinised. We have encouraged transparency because we believe that we can make our case. Unlike in previous generations, when the costs were not transparent, we are prepared to be transparent. She might be surprised, because she probably did not realise that the NAO would be looking at this so early. She asks about the public share of waste management. The truth is that the public will have to shoulder a large amount of the cost of nuclear waste, because a vast amount of nuclear waste that has to be dealt with is from the past, from the first two generations of nuclear power stations and from the military’s nuclear programme. That was paid for by the taxpayer and no provision was made for cleaning it up. That is why this deal is different and so good for the taxpayer.
Energy Prices and Profits
Debate between Caroline Lucas and Ed Davey(11 years, 3 months ago)
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Mr Davey
My hon. Friend makes a very good point, which I will come to later. It was the Labour party.
The UK faces a huge challenge, which was made much worse by the failure of the Labour party when in government to even begin to tackle Britain’s energy and climate change problems—a lamentable Labour record, which I will return to shortly. The challenge that I as Secretary of State am tackling is the urgent need to attract massive investment while at the same time helping people with high energy bills. We are trying to attract that investment in a much more unfavourable economic and energy climate than Labour faced. The recession, and especially its impact on investors, has meant that people are less willing to invest, so we have to try harder to attract that essential investment.
We face global energy markets that are much tighter than they were during Labour’s time. International wholesale fossil fuel prices, which account for up to half of a typical household bill, have gone up by 50% over the past five years. The vast majority of countries are, like us, seeing energy bills go up, but unlike other countries whose recent Governments invested in energy, Britain faces another massive cost pressure on energy bills, all because Labour failed to invest. The synthetic anger and synthetic policies of the Opposition do not fool anybody.
Mr Davey
No. I want to make some more progress and then I will let the hon. Lady in.
We need a genuine debate. I pay tribute to the Energy and Climate Change Committee for its report “Energy Prices, Profits and Poverty”, which I welcomed on the day it was published. It is more balanced and informed than many contributions to this critical debate and we will respond formally to it soon. Essentially, the debate is about how to get the balance right between regulation and competition, the regulations we need and how we can boost competition.
To be fair to the right hon. Member for Don Valley, her motion and part of her speech covered those issues. Her problem is her party’s record and the inconsistent and, frankly, incoherent policies she seems to want to adopt. Let us consider her three-pronged policy package: abolishing Ofgem and replacing it with Ofgem 2; dropping Ofgem’s reforms of the wholesale market in favour of reintroducing a pool; and tackling, in some way, the big six.
It is a fascinating package, because it completely reverses some of the very few things Labour actually did on energy policy. You couldn’t make it up. Labour set up Ofgem in the first place in 1999. On Labour’s watch, Ofgem abolished retail price regulation. It gets worse for Labour because five years ago the Leader of the Opposition, when he did my job, said that he was strengthening Ofgem. If the Labour party wants to abolish Ofgem, which it set up and which was strengthened by the Leader of the Opposition, what on earth went wrong?
We are ensuring that Ofgem’s powers are increased. We have taken a far more measured approach to the independent regulator. We are ensuring that it and we are on the side of the consumer. We started with a review of Ofgem three years ago. We decided on some reforms and are implementing them. We are giving Ofgem tough powers to compensate consumers when an energy firm does something wrong—something that the Leader of the Opposition forgot to do when he was doing my job. Labour was not on the side of the consumer when it was in government. It is noteworthy how much tougher Ofgem has been since the coalition came to power in promoting competition in retail and wholesale markets, in which it has been strongly supported by us.
I will ask the right hon. Member for Don Valley another question—perhaps she will answer this one. Would she keep the tougher powers that we have given Ofgem? Given that it is improving competition in the wholesale and retail markets, would she abandon those reforms? I will give way to the hon. Member for Brent North (Barry Gardiner), because perhaps he will be able to answer.
Energy Bill
Debate between Caroline Lucas and Ed Davey
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I beg to move, That the Bill be now read the Third time.
Let me begin by thanking those from all parts of this House and outside who have helped to strengthen this crucial Bill and bring it to this point. I thank the Energy and Climate Change Committee and its Chair, my hon. Friend the Member for South Suffolk (Mr Yeo), and the informal scrutiny group in the other place for conducting invaluable pre-legislative scrutiny of the draft Bill. I also thank the individuals who gave oral evidence to the Committee, as well as the organisations that took the time to provide expert written evidence and recommendations.
In particular—I think you will agree with me, Mr Speaker—I could not allow the Bill to leave this place without thanking my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes) for skilfully guiding the Bill through Committee. I am told that at one point in Committee he managed to compare himself to Henry VIII and Indiana Jones in the same breath—I am not sure whether he has told his wife. I for one salute his unique style in promoting renewables.
I also want to thank the Ministers of State, Department of Energy and Climate Change for their hard work. It would be remiss of me if I did not also mention my hon. Friend the Member for Wealden (Charles Hendry).
On the Opposition Benches, the hon. Members for Rutherglen and Hamilton West (Tom Greatrex) and for Liverpool, Wavertree (Luciana Berger) have been skilful and insightful. I am grateful that they have applied the principles of constructive opposition to the Bill’s scrutiny rather than the principles of destructive opportunism, which are all too often applied in politics generally—by people of all political colours—but which are all too often not in the national interest. Let me take this opportunity to remind the House why the passage of the Bill is so important and so firmly in the national interest.
Caroline Lucas
I am grateful to the Secretary of State for thanking everyone for contributing to making the Bill stronger, but I wonder how he thinks that it has been made stronger, given that, as far as I can see, not a single Opposition amendment has been accepted, either in Committee or on Report.
Mr Davey
The hon. Lady might not have noticed that the Government have responded to a lot of the debates and tabled a lot of amendments on everything from electricity demand reduction to decarbonisation. I will come to those amendments shortly.
Electricity market reform, which is at the centre of the Energy Bill, is the result of four imperatives: the need to power the country; the need to protect the planet; the need to insulate consumers from rising energy bills; and the need to get the economy moving. With demand for electricity set to increase, and around a fifth of our power plants set to close, we will need to attract £110 billion of new investment in electricity and grid infrastructure in this decade alone to ensure that we have enough reliable capacity to meet demand. The Energy Bill will do that.
The Climate Change Act 2008 commits the United Kingdom to an 80% reduction in greenhouse gas emissions by 2050, so we need specifically to encourage investment in low-carbon energy generation: renewables, carbon capture and storage, and nuclear. The Energy Bill will do that. With global demand driving wholesale prices higher, and with that in turn driving domestic energy bills higher, we need to create a more diverse and competitive energy market to help to cushion consumers from volatile fossil fuel prices. We also need to ensure that they are getting the best deal from suppliers. The Energy Bill will do that.
By facing up to the need to invest in low-carbon energy infrastructure, we will support economic recovery too. The trebling of support under the levy control framework will mean £7.6 billion a year by 2020 to support low-carbon technologies, including infrastructure projects that are ready to go now, supporting jobs, supporting communities and providing prosperity. Projects worth over £8 billion are already in the planning pipeline. Electricity market reform could support as many as 250,000 jobs in the energy sector. The Energy Bill will support green growth. That is why I am pleased that the Bill, as strengthened in Committee and on Report, benefits from a general level of cross-party support in the House.
I want to reflect on some of the ways in which the Bill has been further strengthened in this House. Let me start by dealing with the decarbonisation target head on. No party in this House—not the Liberal Democrats, not the Conservatives, not Labour, not the nationalists, not even the Greens—had a commitment in its 2010 manifesto to set a 2030 decarbonisation target during this Parliament. Nor has any other country yet set a power sector decarbonisation target for 2030.
I can understand the argument that an early decarbonisation target could provide extra certainty for large, long-term projects in the UK power sector, particularly in the supply chain. However, there is also logic in the consistency of setting the decarbonisation target for 2030 at the same time as the fifth carbon budget, which is scheduled for 2016—still 14 years ahead of the target date. By comparison, the 2020 renewables target was set in 2008, just 12 years from its target date.
If anyone still doubts my commitment, or that of this Government, to decarbonisation, they should consider the decision that we have just made on the UK’s position for the EU’s 2030 greenhouse gas target. In the context of winning an ambitious global climate change treaty, we will be arguing for a 50% reduction target in the EU. That is the most ambitious position of any member state, and I am proud that this Government are leading the way on climate change action.
Let me turn to other areas of the Bill—first, to contracts for difference. Long-term electricity price stability will be provided through CFDs and will be a key part of the new low-carbon electricity market. As such, the Commons Committee quite rightly looked at the nature of the CFD counterparty body and made a number of recommendations. In response, the Government have clarified the Bill’s drafting to make the policy intention more explicit.
Cost of Living
Debate between Caroline Lucas and Ed Davey
Mr Davey
It did not take long for someone to mention Europe. The hon. Gentleman will be shocked to hear that, as a Liberal Democrat, I strongly support Britain’s membership of the EU.
The Government are taking other measures. We are cutting fuel duty, we have capped rail fares, and we are helping the most vulnerable with their energy bills. We are extending free nursery provision and helping working parents with child care costs. The Opposition do not like to talk about the Government’s record on jobs. We have helped to create 1 million private sector jobs since we came to power. We have 1 million apprenticeships. That is a record we should be proud of, and one the Labour party was not capable of delivering.
Caroline Lucas (Brighton, Pavilion) (Green)
The Secretary of State says he is helping the poorest with their energy bills, yet this is the first time for 30 years that there is no taxpayer-funded energy efficiency scheme. The energy company obligation does not have enough money in it. It is also funded by a levy on everybody’s fuel bills, which is regressive—it pushes more people into fuel poverty than it draws out. When will he put in place measures that will protect the poorest?
Hinkley Point
Debate between Caroline Lucas and Ed Davey
Mr Davey
I am grateful to my hon. Friend for his comments. I certainly will pay tribute to the officials in my Department and elsewhere who have been critical to bringing the decision forward and, indeed, taking forward the new nuclear programme. I also pay tribute to him. He was an excellent Minister and he played a significant role in the new nuclear renaissance under this Government. There are Liberal Democrats who will not necessarily agree with not so much the decision today, but the overall new nuclear building programme. However, many Liberal Democrats in the local area and in the national party believe that we need to focus on climate change as a real and present danger to our country and the planet. Difficult decisions are required if we are to tackle climate change.
Caroline Lucas (Brighton, Pavilion) (Green)
There are much faster, cheaper and more affordable ways to tackle climate change than nuclear, but my question to the Secretary of State is about the only two nuclear power stations under construction in Europe today. They are billions of pounds over budget and delayed by an ever increasing number of years. Italy, Switzerland, Belgium, Holland, Spain, Germany, Sweden and Denmark are all rejecting new nuclear. Even France is aiming to reduce its reliance by 25%. What do all those countries know that we do not? Why is the Secretary of State locking UK consumers into artificially high energy prices for years to come—to the benefit of the French Government, not the UK taxpayer?
Mr Davey
The hon. Lady has pushed her views for some time, and I have respect for them, but tackling climate change means that we need every form of low-carbon generation possible. The risk and the challenge are so great that it is wrong for people who are worried about climate change to turn their back on the issue. She points to other countries, but around the world many countries are looking again at new nuclear. She is right that the two new nuclear power stations that are being built are over budget and out of their original time schedule. That is why we are being extremely careful in our approach to those negotiations and to the new nuclear programme, learning the lessons of the past and from other countries so that we do not repeat those mistakes.
New Nuclear Power
Debate between Caroline Lucas and Ed Davey(11 years, 10 months ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I am grateful to the Backbench Business Committee for the opportunity to set out the coalition Government’s policy on new nuclear power. This has been a well- informed and constructive debate. A wide variety of views have been expressed, so let me start by putting my views on the table and setting out how I see the political reality of nuclear power and policy.
Notwithstanding some of the sentiments expressed today against nuclear power, the coalition Government policy on nuclear power enjoys wide agreement in this House, as we heard from the right hon. Member for Don Valley (Caroline Flint) just now. The national policy statement for energy infrastructure on nuclear power generation, which was debated in the House on 18 July 2011, detailed the case and the need for new nuclear power stations in the UK. It set out how a new generation of nuclear power stations are a key part of our future low-carbon energy mix, tackling climate change and helping to diversify our supply, contributing to the UK’s energy security. That policy statement passed with only 14 votes against. Both the Conservative party and the Labour party are in favour of new nuclear power. That makes for a majority in this House of 450-plus.
The reality of the overwhelming support in Parliament for nuclear power is reflected in the coalition agreement, as set out by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). We have implemented a process allowing Liberal Democrat MPs to maintain opposition to nuclear power, while permitting the Government to put in place the requirements for new nuclear construction. I completely respect those who have long been opposed to nuclear technology on principle. I have had my concerns in the past, as the record shows, but I am now satisfied that the safety and legacy issues are manageable. My remaining concern—this has always been my principle concern—is about the cost of new nuclear. I will deal with that later in my speech.
Caroline Lucas
It is very kind of the Secretary of State to give way. The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry) will testify to the fact that that we were both on a late train. I apologise.
The Secretary of State is right to say that the majority of the House is in favour of nuclear power, but this motion is not about nuclear power per se; it is about public subsidies, and I am not sure that a majority is in favour of the huge subsidies that will go to nuclear power.
Mr Davey
I am grateful to the hon. Lady and am glad that her train arrived. I will deal with the issue of subsidy later.
I urge the hon. Lady and, indeed, all colleagues to consider that the environmental case for new nuclear has got stronger in the past decade or more. I am one of those from the green movement who have been prepared to recognise the low carbon benefits of nuclear generation, which remain even when life-cycle analysis of carbon for a new nuclear station is taken into account. I believe that nuclear, alongside ambitious energy efficiency, renewables and carbon abatement, can play an important role in reducing greenhouse gas emissions.
Nuclear’s cost-effectiveness has to be seen in the context of climate change and decarbonising our power sector. It is right that this House asks the tough questions on the affordability, value for money and cost-effectiveness of nuclear power, for those questions are at the heart of this Government’s policy on nuclear power.
Before I turn to the key issue of the cost of nuclear and of subsidies, let me briefly address recent issues affecting nuclear policy and this debate. The first is GDF—the geological disposal facility for nuclear waste—and what will happen after the recent vote in Cumbria. It was the priority of the previous Government, as it is of this Government, to ensure the safe management of nuclear waste. Britain has a huge legacy of nuclear material to store and dispose of, whether or not we build a single new nuclear reactor. As we develop our new nuclear build programme, it is right that we press ahead with tackling that legacy. I believe that geological disposal is the right policy for the long-term safe and secure management of higher-activity radioactive waste.
Indeed, what happened in Cumbria convinced me even more so, for both Copeland and Allerdale councils voted to participate in the next phase of the work to identify potential sites for geological disposal. The communities that were most likely to host the facility wanted it. However, the Government agreed that Cumbria county council also needed to vote in favour in order to proceed to the next stage, but it did not, which is disappointing. However, the invitation for communities to come forward remains open.
This is a long-term programme, looking at the next century and beyond, to site and build a geological disposal facility. The views in Copeland and Allerdale make me confident that the programme will ultimately be successful. Last week’s decision does not undermine the prospects for new nuclear power stations, but it does require us to redouble efforts to find a safe, secure and permanent site for disposal.
Fuel Poverty and Energy Efficiency
Debate between Caroline Lucas and Ed Davey(11 years, 11 months ago)
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Mr Davey
My hon. Friend is not quite explaining the situation fully. There is an awful lot of coal being burnt in this country and elsewhere, because of its low price, but that has not changed the picture because of the high price of gas.
Britain cannot control the global market. We cannot drive down international wholesale prices, but we must still do everything we can to help the people and businesses facing those rising global prices, especially the most vulnerable and those in fuel poverty—and, despite what the right hon. Member for Don Valley said, we are doing that.
Government policy is designed specifically to drive a wedge between global energy prices and energy bills, now and in the future. It is designed to enable us to cushion and insulate people from the hikes in global fossil fuel prices as best we can. The coalition has a plan to tackle ever-rising energy bills. When the Labour Government were in power, they talked big but did very little. They did not effectively target help on those who needed it most, they did not establish a new market in home energy efficiency and they did not reform the electricity market. We are doing those things. We are acting, whereas they just talked.
Caroline Lucas
Will the Secretary of State explain how promoting a major new nuclear power programme, which will require a subsidy of about £4 billion a year and which will inevitably push up prices, is compatible with trying to reduce the impacts on people in fuel poverty? It is going to make energy far more expensive.
Mr Davey
Two things surprise me about the hon. Lady’s question. First, she seems to know the details of the ongoing negotiations between EDF and the Government. I pay tribute to her if she knows them, but I have to tell her that her figures are completely wrong. Secondly, I would have thought that, given the real threat of catastrophic climate change, low-carbon energy would have changed a number of people’s views on nuclear power, if we can make it cost effective without public subsidy, in line with the Government’s policy.
Energy Bill
Debate between Caroline Lucas and Ed Davey
Mr Davey
I am grateful for the hon. Gentleman’s intervention. He has merely convinced me more that this will be a hot topic of debate. However, I can confirm to him and the House that one of the purposes of the Bill is to decarbonise our electricity supply. That is a critical purpose. We need to move from coal to gas, from fossil fuels to low carbon. We need a more diversified energy mix, with renewables, carbon capture and storage, and new nuclear all playing their part in enhancing the security of our electricity supplies. Low-carbon energy security will help to insulate consumers from fossil fuel price spikes and will help us to meet our climate obligations, including our emissions and renewables target.
The key challenge that prompted the Bill was the need to attract tens of billions of pounds of investment, including investment in low carbon, while keeping energy bills affordable. Given that global gas prices had almost doubled since 2007, which was already putting huge upward pressure on bills, the need to stimulate that essential energy investment as cheaply as possible became a central consideration. Whatever the many debates in which we will rightly engage today and during the Bill’s passage, let no one lose sight of the three core challenges that it was designed to meet: attracting more than £100 billion of investment, creating the world’s first ever market in low-carbon energy, and helping people and businesses around our country who were struggling in the face of rising world energy prices. I think that those aims are widely shared across the House.
Caroline Lucas (Brighton, Pavilion) (Green)
I agree with the Secretary of State about the importance of reducing fuel bills, but if that is important, why does the Bill enshrine a dash for gas? Organisations from the CBI to the International Energy Agency say that that will not reduce fuel bills, whereas much greater investment in renewables and efficiency certainly would.
Mr Davey
I reject the notion that our policy supports a dash for gas, and I absolutely reject the suggestion that the Bill is designed to do any such thing. On the contrary, it is designed to reform our electricity market. It favours not fossil fuels but low-carbon sources, and I should have thought that the hon. Lady and, indeed, all Members would support it for that reason.
You will understand, Mr Deputy Speaker, why I am genuinely disappointed that the Opposition decided to withhold their full support for the Bill in their reasoned amendment. They say that they want our economy to grow, they say that they support low-carbon energy, and they say that they want a better deal for consumers and business, but if they vote against the Bill, they will be opposing growth, opposing decarbonisation and opposing help for people who are struggling with high energy bills. Just a few years ago all the major parties worked together to deliver the Climate Change Act 2008. Why is a party led by the architect of that landmark Act refusing to support the practical reforms that will help to deliver its lofty objectives?
I predict that we will have many debates and exchanges about a decarbonisation target for the power sector—an issue that features prominently in the Opposition’s reasoned amendment—yet it should be noted that this Government will legislate so that the next Government can set a decarbonisation target alongside a fifth carbon budget, even though at the last election the manifesto of no party argued for such a power sector decarbonisation target. We will no doubt hear that industry would benefit from such a target, and I strongly sympathise with that argument, yet industry would be seriously damaged if we were not to take forward our wider reforms of the electricity market.
The right hon. Member for Don Valley (Caroline Flint) has the power to send a much stronger signal to energy investors in the UK even than setting a 2030 decarbonisation target. Almost every investment in energy is a long-term investment lasting far longer than any Parliament, and investors therefore worry about political risk. They worry about what happens if the governing party or coalition is replaced, and they therefore listen to what the Opposition say.
I presume that the right hon. Lady will press her amendment to a Division. If it is defeated, however, will she and her party colleagues support the Bill on Second Reading? I am happy to give way to her if she wants to answer that question—I am afraid she has not been tempted to respond. We shall, therefore, all await her speech with even greater anticipation, to discover whether she intends to vote against the Bill on Second Reading.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey
Caroline Lucas (Brighton, Pavilion) (Green)
12. What recent advice he has received on the effects of shale gas exploitation on (a) water resources and (b) carbon budgets.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
We liaise closely with the Environment Agency on this issue, and it confirms that volumes of water used in shale gas exploration are not exceptional compared with other industrial activities that routinely take place across the United Kingdom. Any operator who wishes to abstract water as an alternative to using public supplies will need a licence. Additional water abstraction will be authorised only where it is sustainable and no risks are posed to the rights of existing abstraction licence holders.
Shale gas exploration is at a very early stage in the UK, and its possible scale is as yet unknown. We have legally binding carbon budgets, and that should reassure the hon. Lady. In addition, I hope that she will be reassured to know that I have announced today that I am commissioning a study of the possible impacts of shale gas development on greenhouse gas emissions.
Caroline Lucas
On the first part of my question, when one recognises the fact that 4 million gallons of water are needed for every single frack, the Minister’s answer about the water supply is very complacent. On the second part, on carbon emissions, why do the official scenarios published last week alongside his gas generation plan set out an option for carbon intensity that is four times higher than the maximum level compatible with meeting our carbon budgets?
Mr Davey
We have legally binding commitments under the Climate Change Act 2008, and our carbon budgets have been set out for people to look at. When we announce strategies it is not unusual for there to be a whole set of analyses, including sensitivity analysis. Yes, one analysis showed higher carbon intensities, but there was also an analysis that showed lower carbon intensities, and I think that people have missed that.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey
Mr Davey
I pay tribute to my hon. Friend for his work on promoting renewable energy in his constituency and his county of Cornwall, particularly in respect of marine energy. I can reassure him that the Government will make decisions based on the evidence. We will crunch through the more than 4,000 responses we have had—an awful lot of evidence, including some substantial new evidence—and our decisions will reflect the evidence.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the Secretary of State share my concern about the mooted 25% cut to onshore wind support? Does he agree that it would disastrous for wind? Does he also agree that the recent announcement of a £1 billion loan from the Department for Business, Innovation and Skills to Petrobas for deep-sea drilling in the south Atlantic completely undermines any progress on renewable energy?
Mr Davey
I congratulate the hon. Lady on asking three questions, but I will not anticipate the announcement that we will make shortly. We support onshore wind—we believe it is a cost-competitive renewable technology, and it has an important place in decarbonisation and in a secure energy supply.
Oral Answers to Questions
Debate between Caroline Lucas and Ed Davey
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Secretary of State join me in congratulating Brighton energy co-op on its launch last night of the first community generation scheme in Brighton? What is he doing to ensure that the electricity market reform proposals will properly support community energy schemes, particularly those by co-ops, housing associations and local authorities?
Mr Davey
I can congratulate the scheme in the hon. Lady’s constituency. It shows that under the new regime of solar feed-in tariffs that we have introduced, there are still many communities that are going forward and making those investments. That belies much of the criticism we have heard in the House today. I can assure the hon. Lady that we want to continue to encourage such community schemes in our future policies. Quite a lot of those schemes will still get the more standard and common renewable obligation approach support. Some of those community schemes will not have to go to the larger-scale contracts because of the difference in the electricity market reform.